Veteran Landlords Decimated by University CrisisMake Text Bigger
In a shock move, the University of Warwick has pulled the rug out from under more than 500 Coventry and Warwickshire landlords.
After guaranteeing some 3,000 plus students for over 500 properties they are now saying to ALL those landlords “So long, we won’t be using your property anymore!”
There will be an Emergency Zoom meeting tonight Friday 2nd October at 8pm for all affected or interested landlords register here: Click Here Meeting ID: 846 0653 9670 Passcode: 093178
Of course, what this means that in November, over 3,000 HMO rooms will be coming on the non-student rental market.
But according to Patrick Sullivan CEO of Red Brick Lettings in Coventry, “there are already over 1,000 empty HMO rooms in that market. It’s going to mean carnage.”
Des Taylor, Casework Director with Landlord Licensing and Defence warned, “most of these properties are what we call basic woodchip HMOs. They are not what the non-student market want and many Coventry HMOs that we’ve inspected fall short of current legislation and regulations”
Because the University of Warwick has been managing the properties for many years, and provided a robust service, landlords under their scheme were compliant even if they didn’t know why or how. Many of these landlords have not had to do the management and that means they have not stayed on top of the legislation and regulations.
Sullivan added that under the scheme the rents were paid, and it offered an almost passive armchair experience. “We now fear for these landlords who will need to be advertising within the next 6 weeks and that they are not fully aware of their legal duties”, he said.
Taylor again, “these landlords are going to be in shock, they’ll panic, and they will not invest in the regulatory requirements that they don’t even know about.
“They will be playing straight into the hands of Coventry City Council with one of the most effective Housing Enforcement Teams and both enforcement and money motivations, these landlords are likely to become bitter and confused about all the changes.
Patrick Sullivan recalled some of the recent changes such as the Homes (Fitness for Human Habitation Act) 2018, Tenant Fees Act 2019 (so tenant fees being scrapped), and The Housing and Planning Act 2016 to name a few which may be very alien to them.
In recent years things have changed drastically since these landlords were hands-on.
Help will be needed with management, licensing and tenant selection by those with current knowledge and practice.
Massive Civil Financial Penalty fines and Rent Repayment Orders will be risks they have never faced before.
Landlords affected will suddenly find they are responsible for that minefield of HMO licensing and day to day management that they are not set up to do. They will do what landlords always do at first and they will get it wrong and face massive fines (Coventry City Council hands out £10,000 fines like confetti.)
Repossession and bankruptcy threat
For many years, the University of Warwick has been one of the country’s largest rent-to-rent operators, taking properties which complied to their own requirements on what they called their “Head Lease Scheme” for an extended period. They then managed the occupancy and maintenance via their own letting operation “Student Lets”.
Covid-19 will doubtless be a major factor in what experts like Patrick Sullivan have been predicting would happen as the University of Warwick appeared to be working hand-in-glove- with Coventry City Council to build thousands of extra student accommodation rooms and it was obvious that the intention was to eventually take all the student rental income into their own properties and cut out private landlords.
A very similar situation to that seen in other University Cities like Manchester where suddenly hundreds of landlords were left high and dry with HMOs in negative equity because their properties had been funded with commercial revenue-based mortgages at well over their bricks-and-mortar valuation.
Patrick Sullivan, “We can see this happening here in Coventry and Warwickshire. Many landlords will face repossession and possible bankruptcy as mortgage companies pull the rug.”
There will be an Emergency Zoom meeting for all affected or interested landlords this evening register here: https://us02web.zoom.us/j/84606539670?pwd=OU11NC9BOU0zRDJHN3lseDhHU1FkZz09 Meeting ID: 846 0653 9670 Passcode: 093178
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